Elon Musk Is Only Somewhat Right That Tesla’s Solar & Storage Can Scale To Rebuild Puerto Rico’s Grid

Puerto Rico suffered devastating losses due to Hurricane Maria. Along with a long list of other challenges, the hurricane destroyed the island’s antiquated generation, transmission, and distribution grids. In part, this is due to their dependence on low-resiliency fossil fuels.

But Elon Musk had a very interesting exchange on Twitter recently.

This led to the governor of the territory responding with a tweet of his own suggesting he was very open to this. Whoever Scott Stapf is, excellent tweet.

How realistic is this? Can Tesla really rebuild Puerto Rico’s electrical supply system? The answer, as with anything complex, is mixed.

Many of the Indicators are Positive

Is Tesla able to provide a mixture of rooftop solar and utility-scale solar sufficient to provide for all of Puerto Rico’s electricity needs? Yes.

Tesla acquired SolarCity and has built utility-scale, commercial, and residential solar installations around the USA. Puerto Rico had electricity demand of roughly 20 TWh annually prior to Maria. That would require in the range of 11.4 GW of solar capacity, if solar were the only option. Puerto Rico already has both wind and solar farms with a combined capacity of about 340 MW. Wind has a higher capacity factor than solar all else being equal, so the combination generated about 2% of Puerto Rico’s demand in 2016.

SolarCity had an installed base of 2.45 GW of capacity when it was acquired by Tesla, so this is a stretch. Tesla has started production at its solar gigafactory in New York state. This, combined with ongoing purchases from absurdly larger-scale Chinese manufacturers, make the number of solar panels achievable. China installed 3 times the amount Puerto Rico would need in 2016 alone, but it’s China.

As someone pointed out recently, Puerto Rico is an island surrounded by water, so it’s easy to get the requisite solar panels there cheaply. Enough solar generation could be sourced and delivered. Installing it all would require imported labour to bolster the Puerto Ricans, but unions from the USA are already landing members to support the rebuilding, including the International Brotherhood of Electrical Workers. This does point to another challenge with replacing the existing structures, which is that unions would also have to agree with both the changes and the labour imports.

Is Puerto Rico well positioned for a strongly solar grid? Yes.

Puerto Rico is in the tropics. Among other things, this means relatively consistent duration of daylight. They don’t have to accommodate long winter nights and short days of generation. And solar energy generates electricity on all but the darkest of days. And the sun shines closer to straight down for much of the day. There are fewer shadows to deal with.

Is Tesla able to provide a mixture of building and grid storage sufficient to provide for all of Puerto Rico’s grid balancing needs with the solar? Eventually, yes.

Being in the tropics reduces the actual need for storage to a day of demand to achieve much greater resilience of electricity than they had prior to Hurricane Maria. After all, when Maria passed, the sun came out again. That amounts to about 55 GWh of battery storage.

Once again, that’s a big number, bigger than anything Tesla has done before. Its largest installation to date is 100 MWh and is only now closing in on completion. However, that ignores the cars. About 210,000 Teslas with an average of about 75 kWh of batteries make for about 16 GWh of batteries. Then there are the Powerwalls, which are a bit of a rounding error, but would be critical in the Puerto Rican context. With the Gigafactory, which will produce its batteries online and on track to achieve 35 GWh a year by end of 2018, including all car demand, this is obviously a limiting factor.

Unlike solar panels, there isn’t another source of Tesla’s grid and home storage that the company can leverage. Tesla is already one of the biggest producers in the world. And the output of the Gigafactory is expected to serve a massive number of new cars rolling off of the line as well as home and grid storage projects all over the world.

Would a solar and storage solution be more resilient in the event of another hurricane? Yes.

Tesla’s new solar tiles have been tested to be able to withstand massive hail better than alternative tiles do, meaning that they would also stand up to objects thrown by hurricane-force winds. Similarly, solar panels in general are typically designed to survive up to 140 mph (225 km/h) winds. And as many analysts including the Department of Energy have pointed out, grid resiliency is not increased by fossil fuels but by renewables.

That said, more has to be done to make solar farms in Puerto Rico capable of dealing with hurricane-force winds. Existing solar farms had minimal to extensive damage during Maria.

Then there are the Less Positive Indicators

Can Tesla have Puerto Rico rezone all necessary land for solar and storage? Maybe.

The island only has about 200 MW of solar energy at present, but that’s sufficient to have governmental thought put into regulation and zoning. Extending this based on emergency needs in the aftermath of Maria is possible. As has been noted, never waste a good crisis.

A megawatt of solar requires about 2.5 acres or one hectare of space. A fair amount of the generation will be on rooftops, but in order to build out solar capacity rapidly, a great deal of it will need to be at utility scale. A working ratio might be 1 MW rooftop to 4 MW utility scale. Puerto Rico already has net metering, so individuals can presumably deal with their requirements. But that suggests that about 23,000 acres or 9,000 hectares have to be set aside for solar generation. For context, that’s about 1% of Puerto Rico’s total land area. It’s significant but achievable.

However, there are existing territorial and extra-territorial actors who have been making a great deal of money off of the expensive fossil fuels previously used to provide 98% of the island’s 20 TWh annual electricity needs. They will be exerting fiscal pressure through all of their myriad channels to ensure that the current model persists and new models don’t emerge. If Musk and Tesla throw their weight behind making Puerto Rico a global case study, it’s likely that this won’t matter, but that likely depends on Musk actually focusing on this sufficiently to drive it forward.

Can Tesla have Puerto Rico institute building codes that are hurricane proof and would allow Tesla solar roofs to work effectively? Probably not.

As Hurricane Irma showed clearly, the right building codes mean that homes and buildings can survive hurricanes. But most homes in Puerto Rico are required to withstand less than Force 3 hurricanes. Ensuring that when homes are rebuilt they are to the new standards of 2011 or greater would mean that solar roofs would still be in place and able to generate electricity when storms pass.

Once again, there will be money and political will arrayed against this, along with competing priorities and an urgent timeline to rebuild basic shelter. Changing codes right now would increase the cost of replacing roofs lost during Maria and delay that process.

It’s certainly possible that individual buildings when rebuilt could be built to withstand another hurricane like Maria, but it’s not required today. And buildings with solar roofs that are built to current standards would suffer just as badly.

Are solar and storage alone a reasonable, efficient, and cost-effective solution for energy for Puerto Rico? No.

Solar by itself has limitations which require larger than necessary amounts of storage to achieve resilience. That’s true of almost any single form of generation. It’s much easier to have a mix of generation. A lot more wind farms would be excellent, targeting roughly the same annual generation from wind as from solar. A bit of biomass electrical generation, especially biomethane with a combined cycle gas plant, would be useful. A lot of demand management and efficiency work would be good. Some tidal and lee side wave energy wouldn’t go amiss. Trying to balance a complete grid with only storage and one type of generation would be foolish when there are alternatives.

Can Tesla provide a complete grid management solution? No.

Puerto Rico’s grid is archaic. The utility and staff have little of the necessary expertise with modern smart grid technologies. The failure of the grid during Hurricane Maria was as attributable to the fragility and age of the generation, transmission, and distribution components as it was to the hurricane itself. Putting in place a much more distributed solar and storage solution requires a substantial rewiring of the distribution and transmission grids, radically different management software and processes, and retrained staff with different skills.

Can Tesla provide all of the legal and regulatory guidance necessary for a completely different model of grid? No.

Puerto Rico has an energy regulator that was only formed in 2014, the Puerto Rico Energy Commission (PERC). It has a monopoly energy provider, the Puerto Rico Electric Power Authority (PREPA). Puerto Rico has lagged behind many other jurisdictions in the USA and elsewhere in its adoption of modern approaches which support strong penetration of renewables. Changing the regulatory structure to allow massive solar and storage will likely require legislative and regulatory expertise which Tesla does not have.

One bright note related to this is that Puerto Rico already has net metering in place and could leverage this as part of the transformation.

Can (or will) Tesla pay for this all itself? No.

Tesla is not a charity. As shown above, the amount of solar and storage is an order of magnitude above what it has delivered to date. There is no reason to think that Tesla can, will, or should pay for all of this. A quick demonstration in preparation for a decade or two of transformation? Sure. How about replacing the governor’s mansion with a Tesla solar tile roof and put in a few Powerwalls? That I can see Tesla paying for as part of this effort.

Tesla’s Board of Directors would overrule any attempt to turn Tesla into a charity.

Can Tesla overcome Puerto Rico’s debt? No.

Puerto Rico is over $70 billion in debt, with another $50 billion of pension liabilities. Given that there are only 3.4 million residents, that’s about $21,000 per person in a territory where the average income is about $18,000. A great deal of that debt specifically comes from the badly mismanaged electrical utility, PREPA. Oddly, Puerto Rico’s debt-to-GDP ratio isn’t particularly high at about 68%. How does this compare?

In 2016, United States public debt-to-GDP ratio was at 104.8%. The level of public debt in Japan 2013 was 243.2% of GDP, in China 22.4% and in India 66.7%, according to the IMF, while the public debt-to-GDP ratio at the end of the 2nd quarter of 2016 was at 70.1% of GDP in Germany, 89.1% in the United Kingdom, 98.2% in France and 135.5% in Italy, according to Eurostat.

Puerto Rico’s debt isn’t particularly bad in other words, but it’s GDP has been falling for decades, not rising. A debt-to-GDP ratio like Puerto Rico’s would be fine in a growing economy. Puerto Rico defaulted on $58 million of its debt in 2015. In 2016, Obama signed it into effectively a territorial bankruptcy management system, PROMESA.

Tesla can’t do anything about that. And rebuilding the grid after Maria will be very expensive regardless of what options are chosen. Puerto Rico can’t afford to pay for a new grid regardless. More debt will accrue. Whether it is well managed or not is a challenging question.

And Tesla will be dealing with PROMESA, not the governor of Puerto Rico, in order to get paid.

Can Tesla and Puerto Rico replace the generation and grid in a reasonable time with solar and storage? No.

As the assessment above shows, the amount of solar and storage is an order of magnitude above what Tesla has delivered to date. It’s not reasonable to expect that in a few months the company could replace the electrical system of Puerto Rico.

There’s a lot more to replacing a grid than just solar and storage. Tesla can certainly help Puerto Rico rebuild, but it will be one of many participants in that process. It could easily make a lot of individual residences and office buildings more resilient with rooftop solar and Powerwalls. It could easily double or triple the amount of solar generation Puerto Rico has today. It could easily set up grid storage that would smooth the use of more renewables.

But Puerto Rico needs a lot more than Tesla can provide and limiting the rebuilding of the grid to solar alone would be foolish.

About the Author

Michael Barnard is Chief Strategist with TFIE Strategy Inc. He works with startups, existing businesses and investors to identify opportunities for significant bottom line growth and cost takeout in our rapidly transforming world. He is editor of The Future is Electric, a Medium publication. He regularly publishes analyses of low-carbon technology and policy in sites including Newsweek, Slate, Forbes, Huffington Post, Quartz, CleanTechnica and RenewEconomy, and his work is regularly included in textbooks. Third-party articles on his analyses and interviews have been published in dozens of news sites globally and have reached #1 on Reddit Science. Much of his work originates on Quora.com, where Mike has been a Top Writer annually since 2012. He's available for consulting engagements, speaking engagements and Board positions.

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